Texas billionaire Robert Allen Stanford, chairman of the troubled Stanford Financial Group, is scheduled to appear in federal court this afternoon on fraud charges after surrendering to FBI agents Thursday in Virginia, officials say. Authorities plan to unseal an indictment charging Stanford, law enforcement officials say, speaking on condition of anonymity because they were not authorized to discuss the case. Stanford surrendered in Stafford, Va., and is to appear in federal court in the state capital, Richmond, the officials say.
A grand jury in Houston has been investigating Stanford Financial Group. The Securities and Exchange Commission filed civil charges earlier this year accusing Stanford and his top executives of conducting an $8 billion fraud by advising clients to buy certificates of deposit from the Antigua-based Stanford International Bank. Investors in Baton Rouge and Lafayette might have lost as much as $1 billion.
The SEC’s lawsuit charged that the bank advertised its CDs in a brochure touting a conservative investment philosophy. But instead the bank’s portfolio was “misappropriated by defendant Allen Stanford and used by him to acquire private equity investments and real estate,” the suit says. An amended complaint by the SEC has accused Stanford and his finance chief, James M. Davis, of conducting a “massive Ponzi scheme” in which early investors were paid returns from money put in by later investors. Davis promised in April to cooperate with federal investigators.
Stanford has maintained his innocence. For the Business Report cover story on how the Stanford scandal has affected Baton Rouge, click here.
